5 crypto regulations to be aware of in 2023

One of the myths around cryptocurrency is that the industry is entirely unregulated. This seems to stem from the decentralized nature of crypto and the fact it is not controlled by central banks or governments. The truth is though that the crypto sector is regulated in several ways and operates with the safety of investors in mind.

This can be seen in how crypto whitepapers give ample details to allow investors to make an informed choice beginning when a new coin is launched for example. Despite this, 2023 looks to be a year where more regulation will come into the cryptocurrency market. So, what are five of the most important new rules to keep an eye out for?

1. Taxes on binary options

One regulatory change which might be discussed in 2023 is a binary options tax. At the moment, most countries do not impose such a tax, so using crypto to trade binary options online is tax-free. 2023 could be the year this changes though, as there is a big debate over whether income from trading binary options should in fact be taxable.

While this change might not relate solely to the crypto industry, it could impact any crypto trader who also invests digital cash into binary options. It may also be something which could affect crypto investors in general.

If the powers that be decide that binary options are classified as gambling and are still not taxable, it could mean people who trade other assets, such as cryptocurrency, will fight to claim the same thing. If this were to be a regulatory change which happens in 2023, then it would result in traders not being taxed on profits they make from cryptocurrencies.

2. MiCA rules in Europe

Although there may be new regulations expected in 2023 for the US crypto sector, the global nature of this industry means it is also sensible to keep an eye on things further afield. Perhaps the biggest story coming up soon in this regard is the planned Markets in Crypto-Assets (MiCA) rules from the EU.

This is set to be one of the very first pieces of legislation to regulate the global crypto market and is set to include new rules around everything from tighter consumer protection to how crypto mining impacts the environment. MiCA is expected to come into force in early 2023, so it is worth being aware of.

3. Tightening up of AML rules in crypto

Just as there are lots of cryptocurrency whitepapers in place to protect investors, the sector also employs anti-money laundering (AML) rules to operate in an ethical manner. It is expected that 2023 will lead to much tighter anti-money laundering laws being introduced across the global cryptocurrency industry.

In terms of what to look out for this year, the so-called ‘travel rule’ is the big change. This basically means any intermediaries in the transfer of crypto assets, such as crypto exchanges, covered by these rules must share additional information about other parties in the transaction with the relevant authorities. After being ratified by the Financial Action Task Force (FATF), this is being rolled out in several jurisdictions globally in late 2023.

4. Promotion of crypto assets

Many people expect to see a major clamp down on how crypto assets are allowed to be advertised in 2023. It is believed this will come into force in many global crypto markets in an effort to mitigate any potential harm to consumers from investing.

This is something which we have already seen in locations such as Spain and Singapore. It is therefore sensible to think other markets, such as the USA, might follow their lead and put more rules in place around advertising crypto investment.

5. More legislation around stablecoins

Anyone who invests in this market knows there are lots of coins around to put money into and various types you could trade. Stablecoins have received a lot of publicity lately as a less volatile way to enter the market. 2023 could lead to more regulation being applied to these coins though.

The Biden government in the US has already completed a report looking into this sort of coin. It is thought that the findings of this report will be used to bring in new rules around stablecoins in 2023. Many think this will involve stablecoins having their backing reserves audited frequently and regulated for greater transparency. This may also be something we see happen in other crypto markets on a global scale.

2023 could be a big year for regulation in crypto markets

Although there is current legislation within the cryptocurrency markets in places like the US, it seems that there is a real desire for more regulation. Due to this, 2023 could be a big year in this regard and lead to the above new rules coming into effect.

 

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